Apr 08, 2021
Meeting record demand during worldwide shutdown: The mortgage industry’s pandemic paradox
In today’s world, where things keep on changing on daily basis and we sometimes find it hard to adjust with the changing needs and scenarios, automation does play an important role for continuous delivery. QA being the gatekeepers, are not only limited to perform manual testing but also play an important role in designing frameworks and implementing test scenarios programmatically.
Financial Services are at the cusp of digital disruption. We might not be witnessing a 'revolution', but all the emerging trends and technologies are certainly proving that we are in the midst of an ‘evolution’.
Most of the large global banks are born pre-digital and are facing the challenge of legacy infrastructure, software, and culture. On the other hand, the new challenger banks are born-digital and carry no baggage of legacy. They are creating products and services that are relevant to the digital age customer’s needs.
Most of the large global banks are planning to either start their new digital banks or buy stakes in some of the challenger banks just as BBVA did recently by taking ~30% stakes in Atom bank. At the least, we will witness many pre-digital born banks investing in and embracing digital trends and technologies in 2016.
Financial services organizations are racing to harness the power of the Bitcoin infrastructure to slash costs. The basic technology underpinning the Bitcoin virtual currency could be used by some of the world's biggest banks. These banks want to use the Blockchain method because it is hard to fool - making fraud difficult, speed up trading systems and make deals more transparent. Many banks such as UBS are already trying out Blockchain technology for different use cases.
Blockchain is the software that both powers and regulates cryptocurrency Bitcoin. In its most basic form, it records ownership of Bitcoin — money — and transactions — one person paying another. The software uses a distributed ledger to police the network, which means a certain proportion of the vast network must sign-off on a transaction before it can be processed. This replaces the need for a ‘trusted middleman’ in a transaction.
The project to test Blockchain-like technology is being led by financial technology firm R3 which has so far signed 30 banks. R3 has done a good job bringing all the rival banks together. We are witnessing a great interest across financial services on trying out this disruptive technology and will continue to see investment in 2016 to try out specific use cases that can give banks a competitive advantage.
2015 was the year that banks began to experiment seriously with biometrics: US financial provider USAA already offers three different biometric login options for its mobile customers (Touch ID, Facial recognition, and Voice recognition). Biometrics has been the ‘Next Big Thing’ in authentication for a long time now, but many things that have held it back have not gone away. There is often the need for costly additional equipment, and processes that require verification by a back office platform which makes it slow. Wells Fargo is testing voice recognition and eye scanning, joining an increasing number of banks and other financial services companies using biometrics technology to authenticate customers using their mobile applications. Nearly one-third of the largest US banks plan to make biometrics available to mobile banking customers by the end of this year.
Robots have begun their invasion of banking. Robots and Artificial Intelligence (AI) in banking have the potential to reduce costs, expand skills, and improve the customer experience while working alongside or replacing humans. According to an article, Barclays believes that AI is the future of banking, and one bank in Tokyo is already staffed by a helpful robot. We have already seen rudimentary examples where users can talk to a computer system to make money transfers or access information.
Robo-advisors, or fully-automated online investment platforms, are also disrupting the financial advisory services. FinTech startups such as Betterment and Wealthfront have managed to pull early investors with their robo-advising platforms offering the perks of low fees and a reduced entry barrier when it comes to minimums. Many large banks including Deutsche Bank have launched their robo-advisor services. Automated financial advisors and planners that assist users in making financial decisions is a very strong use case.
We are certain to see an increased investment into AI in 2016 across financial services.
APIs are yet another vital trend driving disruption, and fueling FinTech startups and open banking data initiatives worldwide. Some of the new banks such as Fidor bank are already reaping the benefits of open APIs. With new rules such as European Payment Service Directive (PSD2) coming into existence, banks will have to implement APIs that can provide access to payment account information to third parties – including their competitor banks – following the customer’s explicit consent.
Consumers now have the power to engage and perform transactions wherever they are, through a device of their choice. To engage customers across all digital media, banks need to be able to provide contextual and personalized product offerings and drive immediate conversion through embedded offerings. With the advent of APIs, banks can easily expose their product catalogs, payment wallets, and other services to digital customers.
APIs are an important component in the digital architecture and banks are investing in building modern applications that can service their customer on a platform of their choice at any point in time. We will continue to see increased investment in 2016 on building APIs and helping banks serve their digital customers better.
Cloud has become one of the mainstream strategy topics for most large global banks. The debate is not if, but, how will they eventually embrace cloud – if not public cloud, then private cloud or hybrid cloud – and which version to select for which function.
Banks will continue adopting Cloud services for their business applications, while carefully keeping sensitive data housed at private data centers. According to CIO.com, Deutsche Bank plans to have 80% of its systems based in the cloud by 2020. Today, cloud has matured and covers a panacea of Software-as-a-Service, Infrastructure-as-a-Service, Platform-as-a-Service, and more. It is certain that if not public, private, and hybrid clouds will play a vital role in the banks’ digital future.
Join us at Netherland India Business Meet 2016 to hear Santosh kumar speak on ‘The changing face of Financial Services’
Last week, the CEO of HCL Technologies, Anant Gupta talked about the emerging contours of the 21st Century Enterprise (21CE) on his LinkedIN Influencer Blog platform. I’ve been fortunate to have had several discussions with him on this subject.
A friend of mine was very worried the other day. His son, based in Toronto, had just informed him that he was transferring his savings from one of Canada’s largest and most established banks to one that had virtually no physical presence. No typical neighborhood branch to walk into, no tellers to interact with over the counter. All transactions would be carried out over the Internet, mobile app or via telephone. He asked if he should stop his son from switching banks as such a “virtual” institution did not inspire his confidence.
A disruptive innovation can help create a new market and value network, or disrupt an existing market and value network by displacing an earlier technology. The term is used to describe innovations that improve a product or service in ways that the market does not expect; typically first by designing for a different set of consumers in a new market, and later, by lowering prices in the existing market.
The surge in content demand as people are confined to their homes coupled with the unique inability to create new content, put the focus on repurposing old content efficiently and fast, leading to accelerated adoption of automation- and AI-related solutions that were already in the market. But as the pandemic extended and the end became fuzzier, point solutions that were geared for different purposes were quickly extended to fit the need of the hour, as media companies scrambled to meet the increased demand or stem the dramatic loss of revenue. This has impacted the product evolution journeys of many solutions and will continue to influence alliances and acquisitions in the months to come.
Today’s buyers are a different breed from what their predecessors were just a decade ago. Social media, cloud, general mobility, and Business Intelligence (BI) continually impact buyer behavior. Many of today’s buyers have grown up in the digital age with instant access to information and thus tend to be information seekers. This behavior not only applies to their personal lives but is also evident in the professional sphere. Around 75-80% of sales activities are now happening digitally₁, and remote selling is replacing Face-to-Face (F2F) selling at an increasing rate, regardless of the industry or sales channel.
Digital channels will be more critical than ever in the post-COVID era. However, scaling up digital engagement and marketing operations has its fair share of challenges due to the non-availability of the right talent, cost pressures to make fresh investments, and the lack of time to implement new systems. These challenges can be addressed successfully by creating a flexible resource strategy, nurturing the right mix of talent in operations, deploying marketing automation platforms, and leveraging automation/AI in workflows.
Employees want to be treated as consumers within the organization, from both technology and work environment perspectives. They seek an Amazon or Netflix-like experience, and rightly so, this should be the norm. But limited investments often restrict the HRs’ ability to provide true consumerism to their workforce. The key is in understanding how individuals operate and what they need. By building personas and crafting content-based employee journey maps, HCL can create a unified, on-demand ‘know me’ employee experience within the client environment.
